Can we have a do over?
Are there still tea boats in boston harbor?
No and yes.
Private Mortgage Insurance (PMI) is insurance that protects your lender against non-payment should you default on your loan. It's important to understand that the primary and only real purpose for mortgage insurance is to protect your lender—not you. As the buyer of this coverage, you're paying the premiums, so that your lender is protected. PMI is often required by lenders due to the higher level of default risk that's associated with low down payment loans. Consequently, it's sole and only benefit to you is a lower down payment mortgage.
It is a required part of loaning to those who have no down payment, and it was a reasonable plan. In the past a typical down payment was between 10-20% of the loan. If one bought insurance to cover that same amount, then lenders would be protected at the same level.
What we're not hearing is too much conversation from these insurance companies. Where are they? Are they not paying the lenders the required default money? That would be the money the banks would use to reposition/resell these homes on the market.